How does bitcoin help the poor?
You’ve probably heard that Bitcoin’s rapid price increase means only the wealthy can benefit from it. For a long time, some people have considered Bitcoin a financial instrument for helping the rich. Indeed, global corporations and high-profile asset managers were the early Bitcoin adopters. Currently, there’s no sufficient evidence that Bitcoin can play a vital role in ending poverty. However, many people believe that this virtual currency can help the poor.
Poor people suffer from the hyperinflation of their countries. In developing countries, governments print excess money, making fiat conventional currency less valuable. Inflation causes the value of commodities to increase in these countries. What’s more, the poor’s cash in their bank accounts loses its value.
Bitcoin is decentralized, with no central authority or government regulating its production. What’s more, its finite supply means that only 21 million tokens can ever exist in the world. Thus, its value increases with the increasing demand. Bitcoin’s finiteness prevents inflation. Consequently, Bitcoin stops inflation, thereby lessening global poverty.
Governments in developing nations implement laws and regulations restricting capital flow in and out of geographical borders. As such, many individuals in such countries lack adequate capital access.
Bitcoin’s decentralization protects it from such restrictions. Thus, such governments can’t prevent the poor in their countries from accessing the much-needed capital. Additionally, Bitcoin’s supply depends on the underlying protocol, meaning governments and politicians can’t use it for political gains.
Traditionally, credit companies and financial institutions have charged their customers higher transaction fees. But Bitcoin uses blockchain technology to lower transaction costs for users. Thus, eliminating third parties means the poor can transact with Bitcoin when paying for goods and services. What’s more, Bitcoin’s cheap cross-border transfers mean people can access the necessary capital from relatives, friends, and donors to end their poverty.
Today, people can access Bitcoin even without bank accounts. Thus, even the unbanked poor in developing countries can transact with Bitcoin. Also, platforms like Bitcoin Prime allow anybody to register and start trading this virtual currency. Essentially, Bitcoin levels the playing field.
Accountability and Transparency
Bitcoin fosters transparency and accountability in transactions. Being a financial asset means Bitcoin enables individuals to own property transparently. Some poor people in developing countries can’t own property due to accountability issues. Bitcoin uses blockchain technology to enhance transparent transfers and ownership.
When the poor use Bitcoin to own properties, they can eventually end their poverty. A Bitcoin user requires a computer or smartphone to purchase and hold this virtual asset with blockchain technology. Thus, even the poor can access and acquire this virtual asset and then buy and store it in their digital wallet for future sales and gains.
Central powers don’t control Bitcoin because it runs on blockchain. What’s more, the absence of intermediaries lowers Bitcoin’s transaction fees. Therefore, Bitcoin helps the poor by increasing their savings and access to capital. The extra costs that people save when transacting with Bitcoin can go to their investments.
Ideally, Bitcoin allows everybody to invest in it. It also enables the impoverished people to control their investments. Since Bitcoin operates outside the conventional system, nobody can discriminate against other users.
Stealing Bitcoin is not as easy as cash. Consequently, this cryptocurrency limits corruption, a significant challenge in developing countries. What’s more, ensuring donations reach the right people or the needy is not easy with fiat money. Some governments in developing countries have borrowed loans that end up in the hands of the ruling class. With Bitcoin, donors can ensure that aids go to the right people.
The Bottom Line
Bitcoin is the future currency for everyone. This digital currency creates a level playing field for everyone. It also cushions the poor in developing countries from poor monetary policies that cause inflation and other issues. Thus, Bitcoin’s adoption could significantly help the poor.